Investor jitters over the possibility the Federal Reserve is ready to raise interest rates this year roiled Wall Street on Friday, handing the stock market its worst day in more than two months.
The Dow Jones industrial average sank nearly 400 points, its worst single-day loss since June. The broad slump wiped out two months of gradual gains, jolting the market out of a mostly flat course over the past several weeks.
Phone and utilities stocks, which investors have sought out this year for their high dividends, fell far more than the rest of the market. Energy companies, which have also gained a lot this year, took a drubbing as the price of crude oil fell.
Remarks by a Fed bank president early Friday fueled growing speculation among traders the central bank could be ready to lift its key interest rate for the first time since December 2015. Ultra-low interest rates have been a key driver of an extended stock market rally.
"We have a good probability that we're getting it by the end of the year," said JJ Kinahan, chief strategist at TD Ameritrade.
The Dow lost 394.46 points, or 2.1 percent, to 18,085.45. The Standard & Poor's 500 index slid 53.49 points, or 2.5 percent, to 2,127.81. The Nasdaq composite index lost 133.57 points, or 2.5 percent, to 5,125.91.